§480-Z. Compensation

The department may establish a program providing for compensation of unavoidable losses to an area listed in subsection 7 due to a proposed activity. Compensation must include the restoration, enhancement,
creation or preservation of an area or areas that have functions or values similar to the area impacted by the activity, unless otherwise approved by the department. Preservation
may include protection of uplands adjacent to an area. [2007, c. 527, §1 (AMD).]

The department may require that compensation include the design, implementation and
maintenance of a compensation project or, in lieu of such a project, may allow the
applicant to purchase credits from a mitigation bank or to pay a compensation fee.
If compensation is required, the completion and maintenance of a project, purchase
of credits or payment of a compensation fee must be a condition of the permit. [1997, c. 101, §1 (NEW); 1997, c. 101, §2 (AFF).]

The department shall identify an appropriate project, or determine the amount of credits
or compensation fee, based upon the compensation that would be necessary to restore,
enhance, create or preserve areas with functions or values similar to the areas impacted by the activity. However, the department may allow the applicant to conduct
a project of equivalent value, or allow the purchase of credits or payment of a compensation
fee of equivalent value, to be used for the purpose of restoring, enhancing, creating
or preserving other functions or values of the area that are environmentally preferable to the functions and values impacted by the activity,
as determined by the department. The loss of functions or values of one type of area may not be compensated for by
the restoration, enhancement, creation or preservation of another type of area. For example, the loss of functions or values of a coastal wetland may not be compensated for by the
restoration, enhancement, creation or preservation of freshwater wetland functions
or values. [2007, c. 527, §1 (AMD).]

A project undertaken pursuant to this section must be approved by the department.
The department shall base its approval of a wetlands compensation project on the wetland management priorities identified by the department
for the watershed or biophysical region in which the project is located. The department shall base its approval of a compensation project concerning an area
listed in subsection 7, paragraph C, D or E on the management priorities identified
by the department for the type of habitat. The department may not approve a compensation project for unavoidable losses to an area until the applicant has complied with all other applicable provisions of this article
and all applicable rules adopted by the department pursuant to this article. For
purposes of this section, "biophysical region" means a region with shared characteristics
of climate, geology, soils and natural vegetation. [2007, c. 527, §1 (AMD).]

1.Location of project.
A compensation project must be located on or adjacent to the project site, unless
otherwise approved by the department. A compensation project must be located in the
same watershed as the area affected by the activity unless the department determines, based on regional hydrological
or ecological priorities, that there is a scientific justification for locating the
compensation project outside of the same watershed.

[
2007, c. 527, §1 (AMD)
.]

2.Approval of mitigation bank.
A mitigation bank from which any credits are purchased must be approved by the department
consistent with all applicable federal rules and regulations.

[
1997, c. 101, §1 (NEW);
1997, c. 101, §2 (AFF)
.]

3.Compensation fee program.
The department may develop a wetlands compensation fee program for the areas listed
in subsection 7, paragraphs A and B in consultation with the Department of Agriculture, Conservation and Forestry, the United States Army Corps of Engineers and state and federal resource agencies,
including the United States Fish and Wildlife Service and the United States Environmental
Protection Agency. The department may develop a compensation fee program for the
areas listed in subsection 7, paragraphs C, D and E in consultation with the Department
of Inland Fisheries and Wildlife.

A. The program may include the following:

(1) Identification of wetland management priorities on a watershed or biophysical
region basis;

(2) Identification of the types of losses eligible for compensation under this subsection;

(3) Standards for compensation fee projects;

(4) Calculation of compensation fees based on the functions and values of the affected
areas and the cost of compensation, taking into account the potential higher cost
of compensation when a project is implemented at a later date; and

B. Any compensation fee may be paid into a compensation fund established by the department
as provided in subparagraph (1) or to an organization authorized by the department
as provided in subparagraph (2). A compensation project funded in whole or in part
from compensation fees must be approved by the department.

(1) The department may establish compensation funds for the purpose of receiving compensation
fees, grants and other related income. A compensation fund must be a fund dedicated
to payment of costs and related expenses of restoration, enhancement, preservation
and creation projects. The department may make payments from the fund consistent
with the purpose of the fund. Income received under this subsection must be deposited
with the State Treasurer to the credit of the compensation fund and may be invested
as provided by law. Interest on these investments must be credited to the compensation
fund.

(2) The department may enter into an enforceable, written agreement with a public,
quasi-public or municipal organization or a private, nonprofit organization for the
protection of natural areas. Such an organization must demonstrate the ability to
receive compensation fees, administer a compensation fund and ensure that compensation
projects are implemented consistent with local, regional or state management priorities.
If compensation fees are provided to an authorized organization, the organization
shall maintain records of expenditures and provide an annual summary report as requested
by the department. If the authorized agency is a state agency other than the department,
the agency shall establish a fund meeting the requirements specified in subparagraph
(1). If the organization does not perform in accordance with this subsection or with
the requirements of the written agreement, the department may revoke the organization's
authority to conduct activities in accordance with this subsection. [2007, c. 527, §1 (AMD).]

4.Relationship to other provisions.
The purchase of credits from a mitigation bank or the payment of a compensation
fee in no way relieves the applicant of the requirement to comply with any other provision
of this article, including, but not limited to, the requirement to avoid or minimize
effects on wetlands and water quality to the greatest extent practicable under section
480-X.